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Value of UK construction disputes down 12% in 2015

The value of UK construction disputes has fallen by 12 per cent in a year in response to financial pressures faced by contractors and courts.

Failure to properly administer contracts remains the main cause of construction disputes, according to a report by consultancy Arcadis.

The value of disputes relating to major UK construction projects fell from £19m in 2014 to £17m in 2015.

This is the second consecutive year in which the UK has registered a fall, according to the Global Construction Disputes: Don’t get left behind report.

The time taken to resolve disputes continued to rise in 2015, in keeping with the rest of the world, but the UK’s average remained the shortest worldwide at just under 11 months.

Arcadis head of UK contract solutions Gary Kitt said: “It’s encouraging to see a slight dip in the value […] of UK construction disputes, which indicates a far greater willingness by both parties to compromise before the onset of formal proceedings.

“Judicial pressure to limit costs, combined with the commercial pressure on construction executives to minimise the cost of disputes, means that mediation and party-to-party negotiation is increasingly becoming the preferred method of resolution.

“Effective mechanisms for avoiding disputes need to be employed as early as possible within a project, and involve the right expertise and support at the right time, so we expect the focus on mediation to be a trend that will continue to gain traction in future.”

The top five causes of global disputes in 2015

1) Failure to properly administer the contract

2) Poorly drafted or incomplete and unsubstantiated claims

3) Errors and / or omissions in the contract document

4) Incomplete design information or employer requirements (for D&B / D&C)

5) Employer / contractor / subcontractor failing to understand and / or comply with its contractual obligations

 

 

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